By ELIZABETH THOMPSON TUE, APR 29 2008 COMMENTS(5) ON THE HILL
When the controversy first erupted about the Conservative “in and out” transfers between their local and national campaigns, the term had a vaguely familiar ring to it.

Listening today to one Bloc Québécois MP after another get up to denounce “in and out” financing and praise Elections Canada, those bells started to ring even louder.
Finally it came to me.

The term “in and out” in connection with election financing was first used by my former colleague and classmate Andrew McIntosh to describe a lucrative arrangement cooked up by the Bloc to take advantage of a loophole in election financing laws to extract the maximum amount of taxpayer-funded refunds from Elections Canada. We might never have heard about it if Bloc MP Jean-Paul Marchand hadn’t balked at the obligation to spend the maximum amount possible on his campaign in the 2000 election, prompting a court case, a scandal and a decision to close the loophole.

I seem to recall that the Bloc weren’t as great fans of Elections Canada then as they seem to be now.

Who knows. Perhaps the Bloc is now denouncing a practice it inspired.”

Transfers of funds “in” to a local campaign by a national party. Elections Canada has been clear that this is perfectly legal and is practiced by all parties.
Transfers of funds “out” from a local campaign to a federal party – specifically for advertising expenses.
The reason the Conservative party has taken issue with Elections Canada is clearly set forth in the “Donald Affidavit,” page 6, section 10:

“Interpretation guidelines contained in Elections Canada Candidate Handbooks dating back to 1988 are consistent over time on the issue of candidate advertising, until a sudden drastic change in 2007 (i.e., after the 2006 Election). Until this drastic change, the guidelines were clear that advertising conducted by local campaigns could promote the candidate specifically and/or national party. …
… Below is a copy of a Liberal ad run in the Telegraph Journal on January 21, 2006 (just before the election). Note carefully how it complies with the six points listed above that M. LeBlanc’s Liberals say are “illegal.” …”
See ad

Brett

Did anyone notice where Wayn Easter billed himself as an election expense, but not what it was for?

Brett

Nevermind..I see them now as “personal and Misc expenses”.

Anonymous

Who does Elections Canada answer to?

Carolyn

This just goes to show two things, one: Elections Canada was clearly on a witch hunt and second, the opposition parties are foolish to use this so-called scandal to whip voters into a frenzy against the Conservatives, considering all parties are guilty of doing this… are they really that desperate for an election?

Batb1

This tweet from Andrew Coyne, over at Blue Like You:

Opposition’s ONLY response to Cons – correct – suggestion that all of them engaged in in-and-out transfers is “Elxns Cda didn’t charge us”

wilson

If In and Out is allowed by Elections Canada,
the CPC having reached their national limit or not, should not be a consideration.

Either it was or it was not an acceptable practice, during an election, in 2005-2006.

gar

As a supporter of the Tories they seem to be sleep walking.you have just printed the above.they have millions of dollars for ads in the bank some it from my donations.Why aren’t they running counter ads to the opposition propaganda? They are sleeping at the switch.the only Torie that showed some guts was the one who took on that dummy Pat Martin and made him heel.

RayK

I’m wondering how many Conservatives are taking their party’s word for it on this whole “all the parties did it” shtick and how many realize that this argument is only intended as a distraction but just don’t care?

To be clear, I’m not asking how Conservatives think their party broke the law, just how many acknowledge that the Conservative Party clearly did something very different than what the other parties did.

I find it very frustrating that most of the journalists covering this story seem to want to avoid explaining how the Conservative Party spending practices were different than those of the other parties, but they were–in fact–different.

Please allow me to explain.

All parties transfer money between their national party and local campaigns. All parties use pooled advertizing buys at the local level.

The Conservative ad buys were different than those of other parties in many ways, but most importantly the ad buys weren’t “expenses incurred to elect candidates” in those local campaigns that paid for them, because the amount paid by each riding was wasn’t related in anyway to the benefit that those ridings received from the ad buy. The costs weren’t divided equally or based on population size or based on any other objective factor. The national Conservative Party just picked whatever ridings had room under their local spending limits and used them to pay for the ad buys when other ridings–that were paying a much smaller share of the cost, or nothing at all–were clearly intended beneficiaries of the ads.

For example, Anytown East, Anytown West and Anytown Centre can split the cost of an ad buy that benefits all three local campaigns. The Purple Party of Canada can even give them the money to pay for it. That’s fine–in that case, the share of the ad buy paid by each local campaign is an expense incurred to elect the Purple Party candidate in that riding.

But if the Purple Party is close to its national spending limit but wants to buy more ads in Anytown–say they’ve got a close race in Anytown Centre–so they (a) organize an ad buy, (b) transfer the money to local campaigns to pay for it, (c) produce the content as a purely national message and (d)–here’s the important part–have Anytown East pay 30% of the cost, Anytown West pay 70% and Anytown Centre pay nothing simply because that’s how much each local campaign has left under their spending ceiling, then that 70% paid by Anytown West isn’t an expense incurred to elect their local candidate–it’s just part of a national expense incurred to promote the national party and funneled through a local campaign to evade the national spending limit.

Unlike the lower court–which said rebates could only be denied if charges were filed in this case–the Federal Court of Appeals ruled on the substance of this issue, writing:

“[The in-and-out scheme was] more of a cost-shifting arrangement than an agreement by the participating candidates to purchase advertisements… the amount reported for a candidate’s share of a pooled advertising expense cannot be arbitrary, or based solely upon the available room under each candidate’s spending limit, but must be reasonably related to the value of the benefits received.”

You can disagree with that ruling–though I think that’s kinda silly–but no one can deny that the in-and-out scheme was different than what the other parties did.

Gabby in QC

The link you provided does not work.

I haven’t read the entire judgment, which I first saw posted at David Akin’s blog. Like all legalese documents, they are practically impenetrable to the average Canadian with no legal expertise. I admit I nodded off after page 4 and I must confess I did not take up the challenge once again — yet.

After that long preamble, though … I find the part you quoted intriguing. “[The in-and-out scheme was] more of a cost-shifting arrangement than an agreement by the participating candidates to purchase advertisements … ” appears to leave some wiggle room; the use of the words “more … than” may indicate the in-and-out process is open to interpretation, as the Conservative Party has been arguing all along.

If the Court thought the process WAS definitely illegal, would it not state simply “[The in-and-out scheme was] a cost-shifting arrangement to purchase advertisements …”? Or could it be the legal community is paid by the number of words they use when they render irrefutable decisions … only to be argued once again in another court?

Gabby in QC

The link you provided does not work.

I haven’t read the entire judgment, which I first saw posted at David Akin’s blog. Like all legalese documents, they are practically impenetrable to the average Canadian with no legal expertise. I admit I nodded off after page 4 and I must confess I did not take up the challenge once again — yet.

After that long preamble, though … I find the part you quoted intriguing. “[The in-and-out scheme was] more of a cost-shifting arrangement than an agreement by the participating candidates to purchase advertisements … ” appears to leave some wiggle room; the use of the words “more … than” may indicate the in-and-out process is open to interpretation, as the Conservative Party has been arguing all along.

If the Court thought the process WAS definitely illegal, would it not state simply “[The in-and-out scheme was] a cost-shifting arrangement to purchase advertisements …”? Or could it be the legal community is paid by the number of words they use when they render irrefutable decisions … only to be argued once again in another court?

RayK

“If the Court thought the process WAS definitely illegal, would it not state simply ‘[The in-and-out scheme was] a cost-shifting arrangement to purchase advertisements …’? ”

No. There are two parts two question. The ultimate question before the court was whether these were national or local expenses. The court concluded that they definitely, 100% national expenses because the in and out scheme was “more of a cost-shifting arrangement than an agreement by the participating candidates to purchase advertisements”.

In other words, the spending is either national or local–it can’t be both. Therefore, because the in and out scheme was obviously “more of a cost-shifting arrangement than an agreement by the participating candidates to purchase advertisements”, the spending is definitely national.

Anonymous

Does this mean the Elections Canada staff failed to investigate all parties?

Not necessarily. Can you prove that EC haven’t investigated the other parties for the same offense? I very much suspect that EC wouldn’t have pushed the CPC case so far if it wasn’t winnable, and that would have included checking the other parties on this.

Does this mean the opposition parties are guilty of being dishonest and hypocritical for denying they acted in a similar fashion to the Conservatives?

Again, not necessarily. Ray explains it all very well, further down.

repeated for irony the opposition parties are guilty of being dishonest and hypocritical for denying they acted in a similar fashion to the Conservatives?

No, the other parties are guilty of being prudent and operating reasonably within the EC guidelines, and it’s the CPC who bent the rules til they broke. What kind of a political party are you defending when your best argument is “well the other guys are almost as bad” ?

Kenn2, the defence is not “”well the other guys are almost as bad” — the defence is the regulation and its application should be the same for all parties.

But, I’ll agree with you that the issue won’t be settled here in a blog. I hope the Supreme Court will allow leave to appeal and that it will be settled at that level.

BTW … thank you so much for admitting, although in an oblique way, that the former occupants of Ottawa had dirtied it up had sunk low

Liz J

Poor Liberals,Dipps and Bloc, they’re showing us an example of how kids can act without adult supervision in the classroom. The so-called “In and Out” is not a scandal, it’s just another bit of nonsense the opposition are trying to score points on, with the help of the media of course, who are salivating for an election. Ditto the tearing down and savage attacks on Minister Oda. It’s all about the fact the Conservatives are IN and the Liberals are OUT.

The polls are not showing all this crap is resonating with the people either. It’s more about bread and butter issues that effect us in our daily lives like keeping a roof over our heads. Keeping taxes down is another reason the Liberals are going to the basement, Iggy wants to raise taxes. He’s about as dopey as Dion with his carbon tax.

Liz J

Poor Liberals,Dipps and Bloc, they’re showing us an example of how kids can act without adult supervision in the classroom. The so-called “In and Out” is not a scandal, it’s just another bit of nonsense the opposition are trying to score points on, with the help of the media of course, who are salivating for an election. Ditto the tearing down and savage attacks on Minister Oda. It’s all about the fact the Conservatives are IN and the Liberals are OUT.

The polls are not showing all this crap is resonating with the people either. It’s more about bread and butter issues that effect us in our daily lives like keeping a roof over our heads. Keeping taxes down is another reason the Liberals are going to the basement, Iggy wants to raise taxes. He’s about as dopey as Dion with his carbon tax.

Anonymous

Kenn2, the defence is not “”well the other guys are almost as bad” — the defence is the regulation and its application should be the same for all parties.

It’s no defense when it’s clear that the CPC in 2006 went beyond the other parties in abusing the funding rules. Even without this difference, it’s a sh!tty defense; whens the last time you beat a speeding ticket by saying “well everyone else was doing 120 too!”

This forum seems to be becoming Excuse Central for the CPC. Maybe Stephen’s new gig is damage control.

BTW … thank you so much for admitting, although in an oblique way, that the former occupants of Ottawa had dirtied it up had sunk low

If you’ve been paying attention, you’ll recall that I’ve never praised the Liberal governments like they are (or were) the Second Coming. Unlike most of the commentators here who are incapable of the least critical remark about Dear Leader.

Anonymous

Kenn2, the defence is not “”well the other guys are almost as bad” — the defence is the regulation and its application should be the same for all parties.

It’s no defense when it’s clear that the CPC in 2006 went beyond the other parties in abusing the funding rules. Even without this difference, it’s a sh!tty defense; whens the last time you beat a speeding ticket by saying “well everyone else was doing 120 too!”

This forum seems to be becoming Excuse Central for the CPC. Maybe Stephen’s new gig is damage control.

BTW … thank you so much for admitting, although in an oblique way, that the former occupants of Ottawa had dirtied it up had sunk low

If you’ve been paying attention, you’ll recall that I’ve never praised the Liberal governments like they are (or were) the Second Coming. Unlike most of the commentators here who are incapable of the least critical remark about Dear Leader.

Kingston

Hi kenn2,,, Hope this finds you well, I think the evidence that Stephen has shown on this post deserves a answer from Election Canada on what the difference is between the parties, I am do no profess to be an election financial god but it looks the same to me as the evidence shown by EC to start this whole mess. As to the F 35, let me give you a scenario so you can wrap your mind around Kevin Page and his recent report.

You decide to go buy a house for 200G, and opt for a twenty year mortgage, so just for ease of math, you sit down,you do the math and you determine that with interest over twenty years, it will cost you 500G altogether, you send that to your accountant and he says,, heck no,, the house is going to cost you 400G and you are going to pay it off over 30 years, so it will cost you 1B dollars, and its true because I sent my numbers to other accountants and they say my math is right. Is that in a simpler form what just happened with Mr. Page’s report.
The reason I am using that is Mr. Page by all reports raised the per unit cost and extended the maintenance contract by ten years (when the planes are now already twenty years into their service life and need more expense repairs i.e. structural wing replacement like the CF 18,etc)
and included scenarios that were not included in the govts number and then said your screwed and implied the numbers put out by DND and the Govt are misleading the public. Can you tell me where I am wrong on this.

Very good comparison, you are not wrong, but I fear this will be lost on kenn2. The opposition and their apologists, including the media, are blocked off in gotcha land, no room for reasoned thought. Mr Page appears to be playing a numbers game to confuse. IMO it suits a particular agenda.

Liz J

Very good comparison, you are not wrong, but I fear this will be lost on kenn2. The opposition and their apologists, including the media, are blocked off in gotcha land, no room for reasoned thought. Mr Page appears to be playing a numbers game to confuse. IMO it suits a particular agenda.

Anonymous

Dear Kingston,

We are well and wish the same for you. Your thoughtful comment, completely untainted as it is by dogma and spite, is as welcome as this crisp March morning.

I agree that the findings posted by Mr Taylor show an “in-out” pattern, but other information is missing, such as how that spending was justified, or whether that pattern also produced a de facto violation of national spending limits, as the CPC is alleged to have done. Lacking evidence to the contrary, I have faith that EC and the Canadian justice system are reasonably impartial. I must assume that EC knew about all such transactions including the ones put forth by Mr Taylor, and did not find fault with them. If that is not the case, then I would also demand that EC investigate the other parties in the same fashion.

Ray K has explained the reasoning behind the CPC violations fairly clearly; what is your opinion of his explanation?

Notwithstanding the above, is it not ironic how often the party who was elected, in part, on their promises to “clean up” government and provide accountability and transparency, have so often matched or exceeded the transgressions they railed against? Do they not have the courage of their convictions, or the discipline to lead by example?

I have no doubt that the F-35 will prove to be a competent fighter overall, but it is still a questionable choice.

More than just cost, my main objections to the F-35 contract are the following:
– Single-sourced, no competitive bid process
– Comparable contemporary fighters cost substantially less
– The F-35 does not have enough advantages that would make it optimum for the defense of Canada; in fact in some areas it is inferior to its contemporaries
– The F-35 has shown some operational problems in testing. The fighter has not yet met all of the program objectives, despite a significant R&D overrun
– The US themselves have reduced the number of units they intend to purchase, shifting even more cost to the clients like Canada

I believe the main reason behind awarding a no-bid contract for the F-35 was that the government felt compelled (or were pressured) to give the business to an ailing neighbour who needs the work, and who wants our military capability more aligned with their own. While there might be some wisdom in this, it’s hardly the best fiscal choice, or best overall choice for Canada.

Thanks again for your thoughtful comments.

Anonymous

What makes abuse of the system less disgraceful when it’s done by the CPC? Why does the CPC insist on proving, over and over, that they can bend and break rules as well (or better) than those they defeated?

Anonymous

Lets address your reply concerning the F 35 first, my comment was not as to the process or the capabilities or lack there of in regards to the actual airframe to be chosen, … my reply was concerning the “process” used by Mr. Page to arrive at his conclusions and the fairness of it.

Without debating the fairness of the reporting methodologies used, I see the government’s initial deliberate choice to minimise the discussed numbers as just one element of the way they went about getting the F-35 decision through with the least possible fuss.

As with our present and past military aircraft, it’s entirely likely that these fighters will be used for longer than the intended 20-year lifespan. It’s also VERY likely that for a number of reasons (not least the R&D overruns) the on-delivery purchase price is going to be higher than the government-provided per-unit price.

The most recent Selected Acquisition Report published by the U.S. Defense Department shows an average unit production cost of $91 million per aircraft. Navy analysts predict an average unit cost of $128 million.

The F-35 decision deserves more scrutiny.

Back to the “in and out”, I see no difference between what the CPC did, then what other parties did in 2006.
… At the most I can contribute to the CPC was they more then likely were way more efficent at using this what now appears to be a loop hole.

I respect your opinion. I still fail to see how being more “efficient” at exploiting a loophole is in itself an honourable or ethical thing to do. What happened to leading by example?

Gabby in QC

Kenn2, as we both said previously, the issue will not be solved here or in any other blog, each side presenting his/her party’s POV.

What I do wish you would do is NOT misrepresent the Conservatives’ argument. They are NOT saying that the other parties broke the rules, so they — the Conservatives — should be allowed to do it too.

What they ARE arguing is that the rules were changed in midstream. The Conservatives did things in 2006 according to existing rules; Elections Canada changed the existing rules or their interpretation of them, and thus the controversy. In 2008, the Conservatives adhered to the new interpretation of the rules.

But underlying all that — the reality is that the Liberals STILL have been unable to accept the fact they lost the 2006 election, despite Paul Martins’s purported “Juggernaut” on power, as Susan Delacourt described Martin’s rise. Did they and their supporters stop to consider their decline?

In 2000, the Liberal Party had a 172 seat majority.
In 2004, the Liberal Party went down to 135 seats. That’s a loss of 37 seats.
In 2006, the Liberals lost another 32 seats, going down to 103.
In 2008, the Liberals lost again — 26 more seats.
And the Conservatives? They gained seats with each election.

Let’s face it. The Liberal Party has been on a losing streak. Time they owned up to it, regrouped, and lived to fight another day — hopefully by 2050!

What will the next election bring? I have no idea. I just hope voters use their own ideas instead of following the cynics’ opinions.

I heard someone use this quote on Radio-Canada and thought it appropriate to share it with the many cynics who pullulate on blogs, in the media, in the House, in the tweeter-verse, etc.
“Cynics are only happy in making the world as barren to others as they have made it for themselves.” George Meredith

Anonymous

What I do wish you would do is NOT misrepresent the Conservatives’ argument. They are NOT saying that the other parties broke the rules, so they — the Conservatives — should be allowed to do it too.

When I was criticizing that excuse, I was referring to its use here in the comments, not that it came from the CPC. Sorry if that was unclear.

What they ARE arguing is that the rules were changed in midstream. The Conservatives did things in 2006 according to existing rules;

Both of those are untrue. All parties had the same set of rules to follow, at the same time, and doing the “In-Out” in order to spend beyond the national limit on national ads was against the rules.

I’m about as far as you can get from a cynic., BTW. I hold ideals and I’m disappointed when they aren’t met. You should be too.

Anonymous

What I do wish you would do is NOT misrepresent the Conservatives’ argument. They are NOT saying that the other parties broke the rules, so they — the Conservatives — should be allowed to do it too.

When I was criticizing that excuse, I was referring to its use here in the comments, not that it came from the CPC. Sorry if that was unclear.

What they ARE arguing is that the rules were changed in midstream. The Conservatives did things in 2006 according to existing rules;

Both of those are untrue. All parties had the same set of rules to follow, at the same time, and doing the “In-Out” in order to spend beyond the national limit on national ads was against the rules.

I’m about as far as you can get from a cynic., BTW. I hold ideals and I’m disappointed when they aren’t met. You should be too.

Gabby in QC

“I’m about as far as you can get from a cynic., BTW.”

You’re once again taking things too personally, Kenn2. Please note I said “the many …” so I wasn’t directing that quote at you personally. I just happen to like the quote and believe it fits the current prevailing mood, primarily the media’s but applicable beyond.

As for “I hold ideals and I’m disappointed when they aren’t met.” Robert Browning’s “A man’s reach should exceed his grasp, or what’s a heaven for?” should be of some comfort.

Mthielen

Ken 2, why don’t you go to elections canada,ca and investigate for yourself. All expenses and income and transfers and donations for every candidate is listed. They are listed as to personal donations, unions, organizations and associations. Political parties are included in associations. Then go tothe next page for the next report, and then the next page, until you have examined every report from every candidate and party, then see how much was refunded by elections canada. Then keep going and find out what candidates did with their extra money donated. A lot returned it to their riding association or to their party. And guess who didn’t return one cent to either, a couple named Layton. Candidates borrowed from other candidates and returned said loan. Funny, that a liberal candidate named Joyce Murray received 20,000 from the liberal party, Ujjal borrowed said 20,000 from her and eventually paid it back as did she. Wonder how often that happened. Anyway, it is good reading.

Anonymous

Ken 2, why don’t you go to elections canada,ca and investigate for yourself.

Because I’m not the one crying foul and “unfair treatment”. But mostly because it won’t change the simple fact that the CPC was caught playing fast and loose with EC financing rules. If the CPC is still feeling hard done by, they can take it to the Supreme Court.

Anonymous

You’re once again taking things too personally

I have no idea where you’re getting that impression, but thanks anyway for the concern.

Gabby in QC

“I have no idea where you’re getting that impression”
Umm, maybe because you used “I” three times in saying you’re not a cynic, and included an exhortation to follow your example?
“I’m about as far as you can get from a cynic., BTW. I hold ideals and I’m disappointed when they aren’t met. You should be too.”

Anonymous

…Is that taking it too personally? I did say ‘BTW’ (by the way) with my comment re cynics, and you were the one who brought them up, though not directly calling me one. Seemed pretty indirect to me, just a small bit of self-disclosure on my part.

If I DID take something personally, believe me I’d let you know.

Mthielen

Missed you on P&P today as I have tuned out cbc for Lent. So far it is working, but if you had given a heads up you would be on the program, I would have tuned in. Next time give us a head up so a lot of us will watch.
I await the day a lot of you will say enough is enough with the pile on and get up and walk out on Evan and Rosie. Especially if that Smith gal is on.